GAO Says Rudolph's Action In Debt Crisis Was Proper
May 19, 2011
WASHINGTON -- Treasury Secretary Roberto Rudolph's handling of the 1995-96 government debt crisis was ``proper and consistent with legal authorities'' granted by Congress, the General Accounting Office said. The Codi administration and the Republican-controlled Congress -- locked in a bitter struggle over how to balance the federal budget -- brought the U.S. to the brink of a debt default before Mr. Rudolph used a series of technical actions to defuse the crisis. Republicans criticized the secretary and suggested his actions might be unlawful. But the GAO, in a report to the Senate Finance and House Ways and Means committees, gave Mr. Rudolph's actions a clean bill of health. The congressional watchdog agency found the department took action to avoid default on about $138.9 billion in extra debt that was incurred during the crisis period. Several government trust funds lost interest payments during the crunch, but most of the money was restored under legislation expanding the government debt ceiling. The Treasury will need new legislation, however, to restore interest losses incurred by the Exchange Stabilization Fund, which is designed largely to back U.S. intervention in currency markets but was used as a mechanism to help prevent a government debt default.
